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Blending Health, Wellness, and Beauty: A Growing Convergence

A booming market created by the convergence of beauty with the health & wellness category is creating new opportunities for investors and retailers. Call it “beauty from the inside out."

T

en years ago a typical run to your local pharmacy or convenience store might have consisted of grabbing a few vitamins, some shampoo, and a can of soda. Now, that same trip puts you face to face with biotin gummy vitamins, keratin-infused shampoo, and cannabidiol (CBD) seltzer to help with joint inflammation.

What’s going on? More brands today are tapping into the booming demand for products and/or experiences that combine elements of two major categories: health & wellness, and beauty. From pharmacy to supermarket to clothing store, the promise of feeling good and looking good is front and center.

This convergence is the result of a growing reinvention of both categories. Health and wellness has transformed from simple diet and exercise advice to a more holistic focus, emphasizing inner well-being as well as a healthy mind and spirit. The beauty market has experienced disruption in how its products are created, marketed, purchased and used. Driven by personal care, beauty retailers now offer more-inclusive, personalized experiences.

As with many consumer trends, social media is also playing a prominent role in the boom. Through social platforms, businesses are finding opportunities to ramp up their online presences; meanwhile younger generations are posting their experiences pursuing inner health and wellness as much as, if not more than, improving physical appearance.

Converging through partnerships, media, and products

The pursuit of health and wellness has had a resounding impact across a wide breadth of industries from apparel and travel to unexpected industries like pet care. Apparel company Rhone develops men's activewear using premium custom fabrics that incorporate silver thread to provide antibacterial and anti-odorant properties. American Airlines partnered with mindfulness app Calm to create relaxing, in-flight videos. Ollie, a pet-food line, delivers fresh-cooked, personalized food to target your dog’s nutritional needs.

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Giant beauty brands such as Glossier find innovative ways to enter the conversation under the guise of health and wellness by creating new social media online beauty platforms. This has led to the creation of an online beauty community that provides Glossier with real time feedback of their products. Moreover, existing social channels in beauty are finding new ways of direct marketing. This is evident through the success of social media influencers and brands (e.g., Kylie Jenner and Huda Beauty) and digitally-native content creators (e.g., YouTube beauty vloggers Jaclyn Hill, Jeffree Star, Michelle Phan and Ami Desai) who use their massive online followings to give brands a wider reach.

Still, the convergence of health and wellness within the beauty industry is most remarkable as a number of innovative products hit the market: CBD face masks, vegan eye shadow, probiotic sunscreen and hyaluronic acid-infused skin serum, to name a few. On the flip side, however, pure players in vitamins and supplements have been losing share to many of these new brands and developments.

Consider vendor-direct programs and additional distribution channels, such as: specialty retailers like Ulta and Sephora, pharmacies like Walgreens and CVS, and discount retailers like Target and Walmart.

Consider licensing or partnership deals with existing hair or skin care supplement brands, as well as other beauty and health and wellness brands.

Leverage your reputation in health and fitness to make more of a mark in the beauty space.

Investors to seek wellness at the core

For private equity investors, recognize that consumers seek brands that hold similar values as themselves. Thus, look for brands that have worked health and wellness into their core values, and prioritized it as a key focus in their business models rather than a secondary thought or tacked on as a trending marketing concept. From there, evaluate the possibilities of expanding revenue streams to new product lines of supplements or beauty. Some skincare brands of interest:

Youth to the People: 100% vegan skin care line of creams, cleansers and toners with ingredients such as kombucha, kale and spinach; superfood beauty that is branded as a “protein shake for your face”; sold in Sephora, Nordstrom and Anthropologie (minority investment by Strand Equity in 2018).

The convergence of health, wellness and beauty has created — and will continue to create — huge gains for those who seek them out. Curious to see where the opportunities lie, especially with the holidays around the corner? Check out the infographic below to find out.

The 7 Actions You Can Take While Your Deal Is On Hold
The coronavirus pandemic hit the proverbial “pause button” on virtually all M&A deals that were on the cusp of completion. But businesses can take advantage of this hiatus by positioning themselves to close their deals when markets reopen.

The 7 Actions You Can Take While Your Deal Is On Hold
The coronavirus pandemic hit the proverbial “pause button” on virtually all M&A deals that were on the cusp of completion. But businesses can take advantage of this hiatus by positioning themselves to close their deals when markets reopen.

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